DNA X, Inc.
For the period ended Dec 31, 2025. Filed Apr 15, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Apr 15, 2026
SONM$2.13-7.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-31.
0001641172-25-001720
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-04-15.
0001493152-26-016659
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 114 previous paragraphs and 76 current paragraphs.
28 unchanged; 6 reworded; 42 added; 79 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (42)
Current report
Through our investment in DNA X, LLC, we are a provider of crypto trading services to the public. Our services are available over the internet atwww.dnax.us. We serve individual cryptocurrency traders around the world. Our products allow users to efficiently buy and sell cryptocurrencies with cash or cash equivalents, or to exchange one cryptocurrency for another cryptocurrency. Our platform allows users to execute strategies between pairs of cryptocurrencies that allow them to swap between the currencies as the prices diverge or converge. This allows users to automate strategies without the need to continuously monitor the market. We are developing products to increase the number of cryptocurrencies that are available for trading on our platform and products that are expected to bring in additional customers and drive additional revenue from commissions and fees.
Current report
We are currently operating on a limited basis to monitor the platform and address any bugs or performance issues. We plan to add additional features and products to the platform throughout 2026 as we execute our growth strategy. We will continue to monitor the platform to ensure that it can handle the anticipated increase in trading volume during 2026. We may use social media and traditional media to market our platform to potential customers. We may expand our marketing efforts as new products become available to customers.
Current report
Prior to our purchase of the DNA X platform, we operated a cell phone and hotspot manufacturing and software development company under the name Sonim Technologies Inc. We completed the disposition of substantially all assets of our phone and hotspot business in January 2026.
Current report
The accompanying financial statements present operations from the phone and hotspot business as a discontinued operation for all periods presented and the assets and liabilities of the phone and hotspot business are presented as assets and liabilities held for sale for all periods presented. See Note 4 for account level detail of the discontinued operations.
Current report
Acquisition of Membership Units in the DNA X, LLC Trading Platform
Current report
On December 15, 2025, we acquired 100% of the membership units in DNA X, LLC and its cryptocurrency trading platform that operates under the name DNA X. The platform allows individuals to open an account and to buy or sell cryptocurrencies, or to trade pairs of cryptocurrencies. This business became operational in November 2025 and trading volume has increased steadily since then. Following the sale of our legacy phone and hotspot business, we are now completely focused on operating the DNA X trading platform.
Current report
Sale of Phone and Hotspot Assets to Pace Car Acquisition LLC
Current report
On January 23, 2026 the Company completed the sale of substantially all assets related to our phone and hotspot business to Pace Car Acquisition LLC, or Buyer, for aggregate cash consideration of $15.0 million, less customary working capital adjustments. The Buyer assumed most of our then outstanding liabilities, and a portion of the proceeds from the transaction was used to repay our debt with Streeterville Capital in full. Most of the employees and contractors providing services related to our phone and hotspot business transferred to the Buyer at the close of the transaction.
Current report
Upon the close of the sale, we changed our name from Sonim Technologies Inc to DNA X, Inc. to reflect the shift in our focus to the operation of our DNA X cryptocurrency trading platform.
Current report
ChEF Purchase Agreement
Current report
On September 29, 2025, the Company entered into a ChEF purchase agreement (the “ChEF Agreement”) and registration rights agreement (the “Registration Rights Agreement”), each with Chardan Capital Markets LLC or Chardan, related to a ChEF, Chardan’s committed equity facility.
Current report
Pursuant to the ChEF Agreement, the Company has the right from time to time at our option to sell and issue to Chardan up to the lesser of (i) $500,000 in aggregate gross purchase price of newly issued shares of our common stock, and (ii) the Exchange Cap (as defined in the ChEF Agreement), subject to certain conditions and limitations set forth in the ChEF Agreement and applicable Nasdaq listing rules. We are under no obligation to sell any securities to Chardan under the ChEF Agreement.
Current report
The net proceeds from any sales under the ChEF Purchase Agreement will depend on the frequency we use, and the price of shares of our common stock that we sell to Chardan. The registration statement in connection with the facility became effective on October 29, 2025.
Current report
Registered Public Offering
Current report
On July 2, 2025, the Company consummated a best-efforts public offering (the “Offering”) of 411,111 shares of its common stock, as adjusted for the Reverse Stock Splits, at a public offering price of $13.50 per share, as adjusted for the Reverse Stock Splits. In connection with the Offering, we entered into a securities purchase agreement with certain investor signatories thereto for the purchase of shares of common stock described above.
Current report
Roth or the Placement Agent, served as the exclusive placement agent in connection with the Offering. We paid the Placement Agent a cash fee of 7.0% of the aggregate gross proceeds raised at the closing of the Offering, and reimbursement of certain expenses and legal fees in the amount of $100. We also issued to designees of the Placement Agent warrants to purchase up to an aggregate of 11,604 shares of Common Stock, as adjusted for the Reverse Stock Splits or the Placement Agent Warrants. The Placement Agent Warrants have an exercise price of $13.50 per share, as adjusted for the Reverse Stock Splits, are not exercisable until January 2, 2026, and expire on July 2, 2030. The exercise prices of the Placement Agent Warrants are subject to appropriate adjustment in the event of stock dividends, stock splits, stock combinations, reorganizations or similar events affecting our common stock. Subject to limited exceptions, a holder of Placement Agent Warrants will not have the right to exercise any portion of its Warrants if the holder (together with such holder’s affiliates, and any persons acting as a group together with such holder or any of such holder’s affiliates) would beneficially own a number of shares of common stock in excess of 4.99% (or, upon election by a holder prior to the issuance of any Warrants, 9.99%) of the shares of common stock then outstanding. At the holder’s option, upon notice to us, the holder may increase or decrease this beneficial ownership limitation not to exceed 9.99% of the shares of Common Stock then outstanding. The Purchase Agreement contains customary representations, warranties, and covenants by us. It also provides for customary indemnification for losses or damages arising out of or in connection with the Offering, including for liabilities under the Securities Act, other obligations of the parties and termination provisions.
Current report
The shares of common stock and the Placement Agent Warrants described above and the underlying shares of common stock were offered pursuant to a Registration Statement on Form S-1, as amended (File No. 333-288221), which was declared effective by the SEC on June 30, 2025.
Current report
The net proceeds of the Offering are approximately $4,800, after deducting the Placement Agent fees and expenses and other estimated offering expenses payable by us. We used the net proceeds of the Offering for overall business strategy, for working capital purposes and for general corporate purposes.
Current report
Registered Public Offering
Current report
On May 12, 2025, we closed on a capital investment of 61,111 shares of common stock, as adjusted for the Reverse Stock Splits, and 30,555 warrants, as adjusted for the Reverse Stock Splits, with two investors for an aggregate purchase price of $1,375. In connection with the closing, we incurred approximately $169 in issuance costs, which was offset against the proceeds.
Current report
Each warrant has an exercise price of $24.9552 per share, as adjusted for the Reverse Stock Splits, is immediately exercisable, will expire in five years from the date of issuance, and is subject to customary adjustments for certain transactions affecting our capitalization. The warrants may not be exercised if the aggregate number of shares of common stock beneficially owned by the investor subsequent to the exercise exceeds the specified beneficial ownership limitation provided therein (which is currently 9.99% and 4.99% and may be adjusted upon advance notice). On August 7, 2025, we and the investors entered into an amendment to reduce the exercise price of the warrants to $13.50 per share, as adjusted for the Reverse Stock Splits.
Current report
In connection with the close of the capital investment on May 12, 2025, we issued 1,375 warrants, as adjusted for the Reverse Stock Splits, to Roth on July 2, 2025. Each warrant has an exercise price of $24.912 per share, as adjusted for the Reverse Stock Splits, is immediately exercisable, will expire in five years from the date of issuance, and is subject to customary adjustments for certain transactions affecting our capitalization. The warrants may not be exercised if the aggregate number of shares of common stock beneficially owned by the investor subsequent to the exercise exceeds the specified beneficial ownership limitation provided therein (which is currently 4.99% and may be adjusted upon advance notice).
Current report
On August 22, 2025, we received a letter from the Staff of Nasdaq notifying us that we did not comply with the Stockholders’ Equity Rule. On February 20, 2026 the company received a letter from the Staff notifying us that we have regained compliance with the Stockholders’ Equity Rule following the completion of the Asset Sale on January 23, 2026.
Current report
The key financial metrics for the DNA X trading platform is trading volume which is the dollar value of assets that were traded and was $6,721 from December 15, 2025 to December 31, 2025, and resulted in $27 in commissions revenue, which is usually a fixed rate of 0.4% of the volume. Daily trading volume has been steadily increasing since the trading platform became operational in November 2025. In January 2026 the commissions revenue was $53. We believe that the decrease in cryptocurrencies values since October 2025 has had a negative effect on trading volume. We will continue to monitor the revenue and will consider employing marketing activities to help grow trading volume.
Current report
We believe that our performance is significantly dependent on the investments we make to improve the features available on our trading platform and to improve the customer experience when they execute trades. We will continue to allocate a significant portion of revenue generated from commission to improve the trading platform software and to develop software that will allow the trading of additional cryptocurrencies.
Current report
We are focused on continuing to acquire new customers for the trading platform. Since we purchased the platform, we have not allocated any resources to marketing. In 2026 we will use social media and traditional media to generate publicity for DNA X and to improve brand recognition. We will monitor the number of new active customers to determine if additional marketing resources should be provided.
Current report
Seasonality and New Features Introduction
Current report
We have not noted any seasonality or any significant effect for new features. We will continue to observe how these factors affect trading volume.
Current report
Revenue is recognized by DNA X, LLC, the entity that owns the trading platform, on the day that a trade is completed. DNA X, LLC does not take possession of the cryptocurrency that is traded or of any proceeds from the trade. Only the agreed upon commission is transferred to DNA X, LLC at the time that the trade is completed. The trades settle immediately and there are never any receivables from a trade. The net income from DNA X, LLC is included in other income (expense) in the consolidated statement of operations.
Current report
Revenue from Discontinued Operations
Current report
Revenue from Discontinued Operations is from the sale of the phones and hotspots to cell phone carriers. This business was discontinued on January 23, 2026 when the assets were sold. See Note 4 for details on discontinued operations.
Current report
Operating expenses are general and administrative expenses for the management of the DNA X platform, and for pubic company costs such as legal fees, external auditors, and director fees.
Current report
General and administrative. General and administrative expenses for the year ended December 31, 2025 were $5,406 which includes management costs to manage the DNA X platform following the December 15, 2025 acquisition. Other general and administrative costs were for public company costs such as legal, external auditors, director fees, and filing fees. For the year ended December 31, 2024, costs were for public company costs.
Current report
Interest expense. Interest expense was $1,485 for the year ended December 31, 2025 and was from the notes with Streeterville, the note from DNA Holdings, and for fees paid to finance accounts receivable. There were no notes outstanding in 2024.
Current report
Other income (expense). Other income (expense) was $902 for the year ended December 31, 2025 and was primarily fees from the notes with Streeterville. In 2024 the income was from gains on foreign currency adjustments.
Current report
On January 23, 2026, the assets of our phone and hotspot business were sold for $15 million less normal working capital adjustments. The Buyer assumed most liabilities including accounts payable and customer liabilities related to the phone and hotspot business, and the debt with Streeterville was paid off. The $3.5 million in cash received by us was used for general corporate purposes. We are pursuing an equity transaction to ensure that we can continue to operate the DNA X trading platform until we become cash flow positive.
Current report
We are subject to the risks and uncertainties associated with operating a cryptocurrency trading platform, including the ability to attract new customers and to keep existing customers from moving their business to our competitors. We received approximately $3.5 million in cash proceeds from the sale of our phone and hotspot business on January 23, 2026. We expect that the cash proceeds received from the sale will allow us to operate our DNA X platform through the second quarter of 2026. Because the cash flow from the DNA X platform is not currently generating enough cash to cover our overhead, we will need to raise additional capital in order to fund our operations. Additional capital may not be available on commercially reasonable terms, or at all. Our ability to raise additional capital will be dependent upon a number of factors, many of which are outside of our control, including the factors described in Item 1A. Risk Factors – “The report of our independent registered public accounting firm for the year ended December 31, 2025 contains a statement with respect to substantial doubt as to our ability to continue as a going concern. We may not be able to continue as a going concern if we are unable to raise additional funding” and the other factors discussed in Item 1A. – Risk Factors in this Form 10-K. Due to the uncertainty of obtaining financing, there is substantial doubt regarding the Company’s ability to continue as a going concern as of the date of the filing of this Form 10-K.
Current report
For the year ended December 31, 2025, cash used in operating activities was $23.5 million, primarily attributable to a net loss of $20.7 million from continuing and discontinued operations. An increase to net operating assets of $6.0 million ($11.3 million for contract fulfillment assets, $7.0 million for A/R, partially offset by an increase of $9.5 million for accounts payable) was partially offset by a $3.2 million for non-cash items ($4.3 million for amortization, $2.1 million in impairment charges, and $1.5 million in stock-based compensation, partially offset by a $5.4 million release of a customer allowance liability).
Current report
For the year ended December 31, 2025, cash provided by financing activities was $19.4 million from $13.7 million for ATM and private placements, and $5.1 million from proceeds from three promissory notes.
Current report
We did not have any significant non-cancelable purchase orders as of December 31, 2025 because we stopped purchasing parts and inventory in anticipation of the sale of our phone and hotspot assets in January 2026.
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Removed paragraphs (79)
Previous report
Sonim Technologies, based in the United States, is a leading provider of enterprise 5G solutions, offering a robust portfolio that includes rugged handsets, smartphones, wireless internet devices, software, services, and accessories. These products are engineered for reliable communication in challenging and unpredictable environments, serving sectors such as critical communications, first responders, government, industrial, construction, hospitality, and logistics. We currently have products available at all three U.S. Tier-one carriers – AT&T, T-Mobile and Verizon as well as the three primary carriers in Canada – Bell, Telus and Rogers, and Telstra in Australia. These carriers then resell our products, along with network services, to end customers focusing on two primary end markets: industrial enterprise and public sector. We also sell our products through distributors and resellers in various markets, including Europe and South Africa.
Previous report
In 2023, Sonim announced a strategic expansion initiative, focusing on broadening its market reach with new products, geographical markets, and customer segments including enterprise, small and medium business, and prosumers. This strategy is underpinned by a strong emphasis on execution. We have introduced new product categories: Connected Solutions featuring wireless internet products, a next-generation rugged smartphone, and a new range of mid and low-tier professional rugged phones, all boasting IP ratings, MIL-STD-810H standards, and elements of Sonim’s RPS, highlighting our value proposition to target markets.
Previous report
During the second half of 2024 and through the filing date of this report, Sonim launched the following products:
Previous report
Additionally, the XP10 is now available through our distribution partners in EMEA and Australia. Most of these products are supported by the SonimWare platform and enterprise services. In the first quarter of 2025, the XP Pro 5G and H500 5G each received Verizon Frontline certification. In the first quarter of 2025 we also announced the upcoming launch and availability of the XP Pro Thermal 5G smartphone for Europe which includes an SDK-enabled Sonim IRIS software for custom application development and an integrated thermal camera by FLIR® that benefits a number of vertical trades such as electricians, plumbers, public safety, construction, agriculture, amongst others.
Previous report
Geographic market expansion continues with agreements and product availability through new distribution partners in Europe and South Africa, catering to carrier, reseller, and enterprise sales channels. New partners include TCCM, Brodos, Modino, Ingram Micro, and Cernotech, which bolster our presence in these regions. This strategic alignment supports our commitment to offering reliable solutions and expanding our customer base.
Previous report
During the first half of 2024, the Company was in a transition period, phasing out low margin white label products and commencing selling new products through our carrier channels. Our strategy of moving away from the white label business was accelerated when our manufacturing partners had difficulty maintaining production of our white label products. Revenue in 2024 decreased compared to 2023 due to this transition away from white label products. However, with the launch of new products in the fourth quarter of 2024 and in the first half of 2025, we anticipate significant revenue growth and improved profitability in 2025.
Previous report
With the primary sales channels in the U.S. and Canada consisting of large wireless carriers, the Company’s customer base is highly concentrated. For the year ended December 31, 2024, wireless carriers contributed 75% of our total net revenues, with our top three carrier customers accounting for 62% of our total net revenues. Our rugged smartphones represented 45% of our total net revenues, while feature phones were 35% of our total net revenues, white label products (related party revenue) were 13% of our total net revenues, and connected solutions were 6% of our total net revenues.
Previous report
In alignment with Sonim Technologies’ commitment to quality, reliability, and regulatory compliance, we have prioritized our Trade Agreements Act (“TAA”) initiatives. TAA compliance is crucial in enhancing our market strategy, particularly in expanding opportunities within government and enterprise markets, which demand stringent adherence to regulatory standards. By ensuring our products meet TAA requirements, we reinforce our position as a trusted provider of enterprise 5G solutions.
Previous report
This initiative underscores our dedication to delivering products that not only meet industry-leading standards but also comply with U.S. federal procurement regulations, thereby enhancing our competitiveness in securing government contracts.
Previous report
Looking ahead, Sonim is focused on bringing our new products and solutions offering to our expanded portfolio throughout 2025.
Previous report
Recent Product Awards
Previous report
The first step in selling our products through wireless telecommunications carriers is to receive a product award from the carrier. The award documents the intent of the carrier to carry the proposed product and offer it to customers through their stores or online. The carrier and Sonim agree to a launch date that is generally nine months or longer from the date of the product award. After the product award, the Company and its partners complete the design that includes the unique specifications from the carrier, test the device, obtain certification from the carrier to sell the device, and begin full scale manufacturing of the product based on purchase orders issued by the carrier.
Previous report
As of the filing date of this report, Sonim is completing the development, testing and certification of new products that it expects to launch with various carriers in 2025.
Previous report
Equity Financing
Previous report
On April 29, 2024, we consummated a private placement with a single investor and sold 350,000 shares of our common stock (as adjusted for the Reverse Stock Split) and warrants to purchase up to 350,000 shares of our common stock for an exercise price of $11.00 per share (as adjusted for the Reverse Stock Split) for an aggregate purchase price of $3.85 million. We used the net proceeds from the private placement for working capital and general corporate purposes. The shares of our common stock sold in the private placement (including those underlying the warrants) are subject to registration rights and may not be transferred or sold until 180 days after the closing, or October 29, 2024, subject to customary limited exceptions.
Previous report
ATM Offering
Previous report
On August 6, 2024, the Company entered into a sales agreement (the “Sales Agreement”) with Roth Capital Partners, LLC (“Roth”). Pursuant to the Sales Agreement, the Company may sell, at its option, up to an aggregate of $8.9 million in shares of common stock through Roth, as sales agent. Sales of shares of our common stock made pursuant to the Sales Agreement are being made under the effective Registration Statement on Form S-3. Roth is entitled to compensation at a commission rate of 3% of the gross sales price per share. For additional information, refer to Note 7—Stockholders’ Equity to the consolidated financial statements contained within this report under the title “ATM Offering.”
Previous report
We have no obligation to sell shares under the Sales Agreement, but we may do so from time to time. During the year ended December 31, 2024, a total of 138,988 shares of common stock were sold under the Sales Agreement for net proceeds of $0.4 million after payment of commission fees and other related expenses of $18,000. As of December 31, 2024, the Company had approximately $8.4 million of common stock remaining available for sale under the ATM Sales Agreement.
Previous report
Receivables Financing Agreement
Previous report
To improve its liquidity during seasonally high working capital periods, on September 23, 2024, the Company entered into an invoice purchase agreement (the “Receivables Financing Agreement”) with LS DE LLC (“LS”), pursuant to which LS will provide receivables factoring to the Company, pursuant to which LS will advance 80% of the face value of the receivables being sold by the Company, up to a maximum of $2.5 million of eligible customer invoices from the Company. As of December 31, 2024, there was $0.6 million outstanding under the Receivables Financing Agreement, which is included in Accrued Liabilities in the Consolidated Balance Sheets. For additional information, refer to Note 1—The Company and Its Significant Accounting Policies to the consolidated financial statements contained within this report under the title “Receivables Financing Agreement.”
Previous report
Impairment of Contract Fulfillment Assets
Previous report
The non-recurring costs associated with design and development of new products for technical approval represent costs to fulfill a contract pursuant to ASC 340-40,Other Assets and Deferred Costs. Accordingly, the Company capitalizes these contract fulfillment costs and amortizes such costs over the estimated period of time that the product will be sold, which is typically three to four years. As of December 31, 2024 and 2023, the net contract fulfillment assets were $6.4 million and $9.2 million, respectively.
Previous report
If the Company determines that such contract fulfillment costs are not expected to be recovered, it records an impairment in the period such determination is made. During the year ended December 31, 2024, the Company recorded an impairment of contract fulfillment assets of $6.5 million, $3.0 million of which is included in cost of revenues in the Consolidated Statements of Operations, due to a decrease in projected profit of certain hotspots products, the cancellation of a consumer durable product, and the projected end of life of legacy products as newer products are scheduled to launch. The consumer durable product was cancelled because higher than anticipated manufacturing costs eliminated the expected profit margin on the product.
Previous report
On September 14, 2023, the Company received a letter from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market, LLC (“Nasdaq”) notifying it that, because the bid price for its common stock had fallen below $1.00 per share for 30 consecutive business days, the Company no longer complied with the $1.00 minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”) for continued listing. On August 2, 2024, the Company received a letter from the Staff notifying the Company that it had regained compliance with the Bid Price Rule.
Previous report
Macroeconomic Events
Previous report
Worldwide economic and political uncertainties and negative trends, including tariffs and increasing trade protectionism, inflation, tensions between the U.S. and China, financial and credit market fluctuations, recession risks, labor shortages, supply chain disruptions, political election cycles, changes in laws and interpretations of laws, changes in the volume and relative mix of U.S. government spending, cost-cutting and efficiency initiatives and potential disruptions from international conflicts and acts of terrorism, have impacted and may continue to impact our business and the business of our customers, while also disrupting sales channels and advertising and marketing activities. See “Part I. Item 1A. Risk Factors” in this Form 10-K for further discussion of the possible impact of these factors and other risks on our business.
Previous report
We have implemented and continue to implement measures to address those challenges. We also continue to actively manage our inventory and establish a relationship with third-party manufacturers in an effort to minimize supply chain disruptions. Nevertheless, the above-described events had and will continue to impact the global macroeconomic and geopolitical environments, capital and commodity markets, and global supply chains, which may have an adverse impact on our operations and hinder our ability to access capital, if needed. Our cost of revenue may increase if the component prices increase.
Previous report
We review a variety of key financial metrics to help us evaluate growth trends, establish budgets, measure the effectiveness of our business strategies and assess operational efficiencies.
Previous report
Units Sold
Previous report
Our smartphones include the XP10 model sold in 2024 and 2023, and our XP Pro and XP400 models sold in the fourth quarter of 2024. The number of smartphone units sold during the year ended December 31, 2024 compared to the same period in 2023 decreased by 17%, primarily because 2023 had higher sales of the XP10 after it was launched in November 2022. The number of white label products sold during the year ended December 31, 2024 compared to the same period in 2023 decreased by 72% because white label products were sold throughout 2023 and sales ended in the first quarter of 2024. Our feature phones include the XP3plus, and the XP5plus models sold in 2024 and 2023, and our XP100 model sold in the second half of 2024. The number of feature phone units sold during the year ended December 31, 2024 compared to the same period in 2023 increased by 41%, primarily because 2024 had higher sales of the XP3plus and XP5plus.
Previous report
Set forth below is units sold by product category (in thousands):
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Adjusted EBITDA
Previous report
In addition to our financial results determined in accordance with U.S. GAAP, we believe the following non-GAAP and operational measures are useful in evaluating our performance-related metrics.
Previous report
Set forth below is a reconciliation from net loss to Adjusted EBITDA (in thousands):
Previous report
We define Adjusted EBITDA as net loss adjusted to exclude the impact of stock-based compensation expense, depreciation and amortization, interest expense, income taxes, restructuring charges, and asset impairment charges. Adjusted EBITDA is a useful financial metric in assessing our operating performance from period to period by excluding certain items that we believe are not representative of our core business, such as certain material non-cash items and other adjustments, such as stock-based compensation.
Previous report
We believe that Adjusted EBITDA, viewed in addition to, and not in lieu of, our reported GAAP results, provides useful information to investors regarding our performance and overall results of operations for various reasons, including:
Previous report
We use Adjusted EBITDA:
Previous report
Adjusted EBITDA has limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include:
Previous report
We believe that our performance is significantly dependent on the investments we make in research and development and that we must continue to develop and introduce innovative new products on a two- to three-year cycle. Our partnerships with ODMs are expected to enable us to shift between different types and numbers of devices under development while increasing the size of our internal team at a slower pace than our growth in revenue. We incur research and development costs internally, primarily from the salary costs of our employees, and externally through the use of ODMs for specific research and development projects.
Previous report
While the hardware design of our phones and connected devices is generally the same for all wireless carriers, each device must be configured to conform to the requirements of each U.S. wireless carrier’s network, resulting in higher development expenses as the number of wireless carriers we sell through increases. In addition to the design and configuration costs, each device must undergo a multi-month technical approval process at each carrier before it can be certified to be stocked at each carrier. The approval process for each device for each carrier has historically cost between $0.5 million and $3 million. For certifications outside the U.S., there may be one certification requirement for an entire country or region. Certification requirements for distributors vary by product and by region. We capitalize these certification costs as contract fulfillment assets and amortize them over the estimated life of the product. Prior to the commencement of development of a product for certification, we generally do not receive any purchase orders or commitments. Following a carrier’s review of product concepts, we may receive a product award letter from that carrier to move forward with the development and certification process, at which time we may begin receiving advance purchase orders or commitments. Since the timing of when we seek technical approval with our wireless carriers tends to be cyclical in nature, quarter-over-quarter expenditures may vary significantly depending on the number of approvals in process during the quarter. If we fail to innovate and enhance our product offerings, our brand, market position and revenues may be adversely affected. If our research and development efforts are not successful, then we will not recover these investments that we make.
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Reworded paragraphs (6)
Previous wording
On July 17, 2024, the Company effected a 1-for-10 reverse stock split of its issued and outstanding common stock (the “Reverse Stock Split”). Our common stock began trading on the Nasdaq Capital Market on a post-split basis on July 18, 2024. As a result of the Reverse Stock Split, each share of common stock issued and outstanding immediately prior to July 18, 2024, was automatically converted into one-tenth (1/10) of a share of common stock. The Reverse Stock Split affected all common stockholders uniformly and did not alter any stockholder’s percentage interest in the Company’s equity, except to the extent that the Reverse Stock Split would result in a stockholder owning a fractional share. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who otherwise would be entitled to receive a fractional share instead were entitled to receive one whole share in lieu of such fractional share.
Current wording
On October 28, 2025, we effected a 1-for-18 reverse stock split of our issued and outstanding common stock or the Reverse Stock Split. Our common stock began trading on the Nasdaq Capital Market on a post-split basis on October 29, 2025. As a result of the Reverse Stock Split, each share of common stock issued and outstanding immediately prior to October 29, 2025, was automatically converted into one-eighteenth (1/18) of a share of common stock. The Reverse Stock Split affected all common stockholders uniformly and did not alter any stockholder’s percentage interest in our equity, except to the extent that the Reverse Stock Split would result in a stockholder owning a fractional share. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who otherwise would be entitled to receive a fractional share instead were entitled to receive the value of the fractional share in cash. The Reverse Stock Split did not change the par value of the common stock or the authorized number of shares of common stock. All outstanding stock options, restricted stock units, and warrants entitling their holders to purchase or obtain or convert into shares of our common stock were adjusted, as required by the terms of these securities.
Previous wording
We believe that the growth and future success of our business depend on many factors. While these factors present significant opportunities for our business, they also pose important challenges that we must successfully address to improve our results of operations.
Current wording
After the completion of our asset sale on January 23, 2026, the growth and future success of our business depends on many factors. While these factors present significant opportunities for our business, they also pose important challenges that we must successfully address to improve our results of operations.
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The following tables present key components of our results of operations for the respective periods (in thousands):
Current wording
The following tables present key components of our results from continuing operations for the respective periods (in thousands):
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Liquidity and Capital Resources
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Going Concern, Liquidity and Capital Resources
Previous wording
For the year ended December 31, 2024, cash used in operating activities was $8.5 million, primarily attributable to a net loss of $33.6 million, partially offset by non-cash charges of $14.9 million and net cash provided by a change in net operating assets and liabilities of $10.3 million. Non-cash charges primarily consisted of $3.6 million in depreciation and amortization, $1.5 million in stock-based compensation, $6.5 million in impairment of contract fulfillment assets, and $2.3 million in the provision for credit loss. The change in net operating assets and liabilities was primarily due to an increase in accounts payable of $14.3 million primarily due to an increase in unpaid R&D costs, and an increase in accrued liabilities of $8.0 million primarily due to an increase in accrued customer allowances. These increases were partially offset by a $7.1 million increase to contract fulfillment assets.
Current wording
For the year ended December 31, 2024, cash used in operating activities was $8.5 million, primarily attributable to a net loss of $33.6 million from continuing and discontinued operations, partially offset by non-cash charges of $14.9 million and net cash provided by a change in net operating assets and liabilities of $10.3 million. Non-cash charges primarily consisted of $3.6 million in depreciation and amortization, $1.5 million in stock-based compensation, $6.5 million in impairment of contract fulfillment assets, and $2.3 million in the provision for credit loss. The change in net operating assets and liabilities was primarily due to an increase in accounts payable of $14.3 million primarily due to an increase in unpaid R&D costs, and an increase in accrued liabilities of $8.0 million primarily due to an increase in accrued customer allowances. These increases were partially offset by a $7.1 million increase to contract fulfillment assets.
Previous wording
Income taxes. As part of the process of preparing our consolidated financial statements we are required to estimate our taxes in each of the jurisdictions in which we operate. We account for income taxes in accordance with the asset and liability method. Under this method, deferred tax assets and liabilities are recognized based on temporary differences between the financial reporting and income tax bases of assets and liabilities and the tax effects of net operating loss and credit carryforwards using the enacted tax rates expected to apply in the periods of expected settlement. In addition, this method requires a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
Current wording
As part of the process of preparing our consolidated financial statements we are required to estimate our taxes in each of the jurisdictions in which we operate. We account for income taxes in accordance with the asset and liability method. Under this method, deferred tax assets and liabilities are recognized based on temporary differences between the financial reporting and income tax bases of assets and liabilities and the tax effects of operating loss and credit carryforwards using the enacted tax rates expected to apply in the periods of expected settlement. In addition, this method requires a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The Reverse Stock Split did not change the par value of the common stock or the authorized number of shares of common stock. All outstanding stock options, restricted stock units, and warrants entitling their holders to purchase or obtain or convert into shares of our common stock were adjusted, as required by the terms of these securities.